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For much of the past few generations, the debate over balancing
the federal budget has been a central feature of every
presidential campaign. But over time, the goalposts have moved.
As the amount of red ink has grown steadily larger, the suggested
time frames to restore balance have gotten increasingly longer,
while the suggested cuts in government spending have gotten
increasingly shallower. In recent years, talk of balancing the
budget gave way to vague promises such as "cutting the deficit in
half in five years." In the current campaign, however, it appears
as if the goalposts have been moved so far that they are no
longer in the field of play. I would argue that they are
completely out of the stadium.

It says a great deal about where we are that the symbolic budget
plan proposed last year by Congressman Paul Ryan, the newly
minted vice presidential nominee, has created such outrage among
democrats and caution among republicans. The Obama campaign warns
that the Ryan budget is a recipe for national disaster that will
pad the coffers of the wealthy while damning the majority of
Americans to perpetual poverty. The plan is apparently so radical
that even the Romney campaign, while embracing the messenger, is
distancing itself from the message (it appears that Romney wants
to bathe himself in the aura of fresh thinking without actually
offering any fresh thoughts). In interview after interview, both
Romney and Ryan refuse to discuss the details of Ryan's budget
while slamming Obama for his callous "cuts" in Medicare
spending.

(It is extremely disheartening that the top point of contention
in the campaign this week is each candidate's assertion that
their presidency could be the most trusted not to cut
Medicare. Mindful of vulnerabilities among swing state
retirees, Republicans have also taken Social Security cuts off
the table as well. What hope do we have of reigning in government
spending when even supposedly conservative Republicans refuse to
consider cuts in the largest and fastest growing federal
programs?)

So what was the Ryan Budget's radical departure from the status
quo that has caused such uproar? If enacted today, the Ryan
budget would so drastically upend the fiscal picture that the
U.S. federal budget would come into balance in just... wait for
it.... 27 years! This is because the Ryan budget doesn't actually
cut anything. At no point in Ryan's decades long budget timeline
does he ever suggest that the government spend less than it had
the year before. He doesn't touch a penny in current Social
Security or Medicare outlays, nor in the bloated defense budget.
His apocalypse inducing departure comes from trying to limit the
rate of increase in federal spending to "just" 3.1% annually.
This is below the 4.3% rate of increase that is currently baked
into the budget, and farther below what we would likely see if
Obama's priorities were adopted.

Because there are no actual cuts in his budget, Ryan hopes that
fiscal balance can be restored by 2040 only because he assumes
that we achieve returns to the annual economic growth that are
equal to levels averaged for much of the last century. In other
words, he sees slow growth of the last four years as the
aberration, not the new normal. As with all other government
projections, this is on the extreme optimistic end of the
spectrum. In truth, there is nothing on the horizon that should
make anyone think these growth figures will be achieved.
America's crushing debt, burdensome regulations, political
paralysis, and nagging demographic problems bode poorly for the
return to trend line growth anytime soon. More likely, based on
the speed towhich republicans will shrink from popular backlash,
is that the "cuts" that Ryan proposes will be abandoned as soon
as they prove to be politically unpopular.

In fact, among his other overly-optimistic assumptions are that
the unemployment rate falls to 4% by 2015 and an unprecedented
2.8% by 2021, another real estate boom begins almost immediately,
and there is an average inflation and ten-year treasury rate for
the next ten years of 2.04 and 4.15 respectively. These are
assumptions that would make even the most rabid economic
cheerleaders sit on their pompoms. Despite these pollyannish
economic growth and record low unemployment projections, Ryan
still assumes interest rates will remain near historic lows and
that none of the cheap money showered onto the economy will ever
find its way into the CPI. In other words, it's the economic
equivalent of winning the lottery twice in a row while failing to
account for the higher taxes that accompany such good
fortune.

Like all other government forecasters, Ryan never considers how
rising interest costs on the many trillions of dollars of
outstanding government debt holdthe potential to completely upend
budget projections. For more on this, see my recent commentary
"The Real Fiscal Cliff."

More likely, the continued accumulation of unsustainable levels
of debt under the Ryan plan will eventually cause our creditors
to lose confidence in our ability to repay. It will cause
interest to spike, the economy to tank, unemployment to soar,
spending to rise, revenues to decline, and the budget deficit to
spiral out of control. Rising interest rates hold the potential
to spark a sovereign debt and currency crisis that willrender the
entire plan irrelevant anyway.

While I appreciate that Ryan has the courage to take a position
at the vanguard of his party in the campaign for fiscal
responsibility, the modesty of his plan is just the latest
reminder of how utterly divorced from reality Washington
politicians remain. Like all of his brethren, Ryan is pinning his
budget battling plans on the pain free "grow your way out of it
plan." But as long the government consumes so much of the
nation's productivity, the conditions to create that growth will
never occur. Hope is not a strategy.

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